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Asia Shares Gain As Markets Shrug Off Trump Speech, Note Regional Data

Stock MarketsJan 30, 2018 11:30PM ET
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Investing.com - Asian shares gained on Wednesday with little reaction to President Trump's State-of-the Union speech outside of plans to spend $1.5 trillion on infrastructure which would be a political challenge to get passed by a republican-controlled Congress.

In Japan, the Nikkei 225 rose 0.16%. Japan reported December provisional industrial production rose 2.7%, beating a 1.5% rise expected.

Australia's S&P/ASX 200 gained 0.23%. Australia reported consumer price inflation for the fourth quarter rose 0.6%, compared with a 0.7% gain on quarter seen and at a 1.9% pace on year compared to a 2.0% gain expected. As well, private sector credit for December rose 0.3%, lower than the expected 0.5% gain.

In Greater China, the Shanghai Composite edged up 0.17% and the Hang Seng index rose 0.42%.

China reported its official manufacturing PMI at 51.3, missing a 51.5 level expected for January, a dip down from 51.6 in December. The non-manufacturing PMI rose to 55.3, compared to a steady 55.0 seen. The private Caixin/Markit manufacturing PMI is due on Thursday with a 51.3 level seen in January, a slight fall from 51.5 in December.

Overnight, Wall Street suffered its heavy losses, slumping to second straight day of losses as rising bond yields spooked investors from increasing their bullish bets on equities.

The Dow Jones Industrial Average closed lower at 26,077.96. The S&P 500 closed 1.09% lower, while the Nasdaq Composite closed at 7402.48.50, down 0.86%.

Treasury yields continued to rise, indicating optimism on the outlook of the US economic, raising the prospect for faster pace of rate hikes which could curb the recent rally seen in stocks.

Yet some have argued that while the tightening of rates would reduce the supply of ‘easy’ money available to corporates there were a number of offsetting factors that could support equities including bullish economic growth, tax reform, and ongoing earnings growth.

On the economic front, meanwhile, better-than-expected consumer confidence data adding to narrative of a strong US economy but did little to inspire a reversal in equities.

The Conference Board’s consumer confidence gauge rose to 125.4 in January from 122.1 in December, beating economists’ forecast for a reading of 123.1.

On the corporate news front, Apple shares (NASDAQ:NASDAQ:AAPL) turned negative for the year so far amid growing expectations its iPhone X could undershoot Wall Street sales growth forecasts with the hefty price tag highlighted by many as one of the possible factors.

Healthcare, meanwhile, came under heavy selling pressure following an announcement that Amazon.com Inc (NASDAQ:NASDAQ:AMZN) , Berkshire Hathaway B (NYSE:NYSE:BRKb) (BRK.A, BRK.B), and JPMorgan (NYSE:NYSE:JPM) formed an independent healthcare company.

Asia Shares Gain As Markets Shrug Off Trump Speech, Note Regional Data
 

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Tony Hope
Tony Hope Jan 30, 2018 11:50PM ET
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Is it possible that Asian markets were encouraged or reassured by the presidents speech? Be more modest about your bias.
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